Citi to buy 1.17 million metric tons of carbon credits in 7 years from MicroEnergy Credits

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Citi to buy 1.17 million metric tons of carbon credits in 7 years from MicroEnergy Credits

Greentech Lead
America
: Citi’s Environmental Products Trading and Origination team
will buy 1.17 million metric tons of carbon credits over the next seven years
from social enterprise MicroEnergy Credits.

The carbon credits will be generated by capturing reductions
of greenhouse gas emissions following the installation of efficient household
insulation and heating fixtures in Ulaanbaatar, Mongolia.

The purchase and installation of the fixtures will be funded
through microloans from Mongolia’s XacBank.

A XacBank customer will purchase an energy efficient stove
or home insulation products like a ger blanket, which covers a ger, the
traditional Mongolian portable tent-like structures in which more than one
quarter of the Ulaanbaatar population lives.

Ger blankets increase heat retention, and, like energy
efficient stoves, lower the rate of fossil fuel consumption and carbon
emissions.

The reductions in household emissions accrued through the
use of energy efficient fixtures will be earned by XacBank clients and then
assigned to MicroEnergy Credits, which develops carbon finance projects and
brings clean energy to low income microfinance households in developing
countries.

MicroEnergy Credits will sell the credits to Citi, who will
monetize credits on the open market through its Environmental Products Trading
and Origination team.

Portions of the proceeds from Citi’s carbon credit purchase
will be distributed by MicroEnergy Credits back to XacBank, allowing the
Mongolian lender to expand its clean energy program, build additional marketing
and distribution centers, and increase access to clean energy loans.

“Citi and our partners collaborated to design a carbon
credit financing chain that connects and values energy saved at the household
level with global emission reduction targets and markets,” said Bob Annibale,
Global Director of Citi Microfinance and Community Development.

“Under this arrangement, we are implementing an innovative
market-based strategy to tackle real challenges faced by developing countries,” said Stuart Staley, Global Head of Commodities at Citi.

“MicroEnergy Credits is proud to partner with Citi in this
landmark agreement, which brings microfinance households access to clean energy
incentives typically only accessed by large agencies and corporations,” said
April Allderdice, CEO, MicroEnergy Credits.

“As a triple bottom line bank, dedicated to working for
People, Planet, and Profit, XacBank is committed to tackling air pollution in
our capital city- now the most polluted city in the world in the winter,” said
Bat Ochir Dugersuren, CEO of XacBank.

The first carbon credits are expected to be available for
purchase by Citi in March 2013. The program is in the process of being
registered and approved through the Clean Development Mechanism run by the
United Nations Framework Convention on Climate Change (UNFCCC).

[email protected]

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